Tech majors advanced on Tuesday on renewed buying support after a slide in the last few sessions.

All the three software stocks in the BSE Sensex - Satyam Computer (up 1.95% to Rs 204.20), Infosys Technologies (up 1.32% to Rs 4,098) and HCL Technologies (up 1.25% to Rs 149.55) - were in the positive territory in afternoon trades.

In the last one week, the Computer Software sector, comprising 116 companies, lost 7.15%, or Rs 6,595.25 crore (Rs 65.95 billion), in market capitalisation to Rs 85,529.11 crore (Rs 855.29 billion) from Rs 92,124.36 crore (Rs 921.24 billion). Dealers said that operators were active in software stocks. The recovery was also due to a technical bounce-back after a recent battering, which was largely on geo-political tensions. One of the dealers said the renewed buying support was due to short-covering. Dealers said that tech stocks are unlikely to hold on to their gains, following the US-Iraq war jitters.

The US seems hell-bent on waging a war with Iraq despite dissent from other major nations. Despite the market being in an oversold position, players refrain from taking fresh positions on fears of a further slide. If the US-Iraq war breaks out, the IT sector would be the biggest loser, as the inflow of orders from the US may slow down, hitting revenues adversely. The sector receives over 65-75% of its export revenues from the US.

In addition, a proposal by the Securities and Exchange Board of India to debar foreign institutional investors from participating in trading through the participatory note route, as a part of the code of conduct for them, has raised fears that the activity of FIIs may decline. Players are also worried that the Unit Trust of India may indulge in a selling spree to tackle redemption pressures on some of its schemes. Tech stocks, which are considered to be favourites of FIIs as well as domestic institutions, may be hit severely in case of a sell-off.

However, dealers said there were rumours that the government has directed Life Insurance Corporation of India to come to UTI's rescue. Non-Sensex stocks like i-Flex (up 1.35% to Rs 350), Digital GlobalSoft (up 0.95% to Rs 622.50), VisualSoft Technologies (up 2.52% to Rs 158.85) and Polaris (down 1.92% to Rs 130.20) were the other major gainers among IT stocks.

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